Russian Defense Industry Feels Pinch Of Cut Ukraine Imports

An armed Russian soldier provides security as Russian tanks arrive at a train station in the Crimean settlement of Gvardeiskoye near the city of Simferopol on March 31, 2014. Photo: Reuters/Yannis Behrakis

Broken ties with Ukraine could cost Russia hundreds of millions over the next few years.

The country's defense industry is highly dependent on Ukrainian imports and switching to source Russian-made equipment won’t be easy, especially as other European Union leaders ponder further sanctions.

The Federal Space Agency (Roscosmos) estimated that Russia will need to spend about $940 million (33 billion rubles) between now and 2018 to fill the shortfall of Ukrainian material, according to Kommersant, which cited a letter between the agency’s officials.

The agency reportedly recommended that $66 million (2.3 billion rubles) be taken from the national space program and $665 million (23.2 billion rubles) from defense development programs to help fill the shortfall.

Deputy Prime Minister Dmitry Rogozin, who oversees the Russian defense and space industries, had previously said it could take up to two years to completely switch from Ukrainian imports to Russian-produced equipment, according to the Moscow Times.

Meanwhile, Russia’s other European neighbors are planning to cut off their shipments as well.

The “EU commission will be tasked to prepare targeted sanctions in the sectors of key technology and military,” Austrian Foreign Minister Sebastian Kurz said to Agence France-Presse.

The comments followed a high-level meeting where foreign ministers discussed how to best respond to the flight MH17 takedown last week.